Canadian Stocks Rise on European Optimism, U.S. Retail Sales

Canadian stocks rose the most since Nov. 3, led by energy and raw-materials companies, as European leaders drafted a framework for the region’s bailout fund and U.S. Thanksgiving-weekend retail sales jumped to a record.

Canadian Natural Resources Ltd. (CNQ), the country’s second- largest energy company by market value, advanced 3.7 percent as crude oil rose. Barrick Gold Corp. (ABX), the largest producer of the precious metal, climbed 2.4 percent as gold gained the most in two weeks. Royal Bank of Canada, the nation’s biggest lender, jumped 2.1 percent to follow gains in European lenders.

The Standard & Poor’s/TSX Composite Index advanced 178.15 points, or 1.6 percent, to 11,640.21.

Retail data out of the U.S. was “very encouraging for people,” while the lack of negative news out of Europe allowed for some recovery, Doug Davis, vice chairman of money manager Davis-Rea Ltd., said in a telephone interview. The firm oversees about C$480 million ($465.7 million). “They know what they have to do to solve their problems, and hopefully they will start to do some of these things.”

The S&P/TSX completed a fourth straight week of losses on Nov. 25, the longest streak of declines since July 2008. The benchmark gauge of Canadian stocks (SPTSX) has lost 5 percent since Oct. 31, heading for its eighth monthly loss this year.

Europe’s bailout fund may insure bonds of debt-stricken countries with guarantees of 20 percent to 30 percent, depending on financial markets, according to guidelines that finance ministers will discuss this week. Treaty change is necessary to give veto power over member-state budgets to the European Union Commission, Germany’s Finance Minister Wolfgang Schaeuble said on ARD television in Berlin yesterday.

Materials Stocks

The S&P/TSX Materials Index advanced 2 percent, the most since Nov. 11, as commodities rebounded after record holiday sales in the U.S. fueled optimism demand will remain steady. Retail sales over the Thanksgiving holiday climbed 16 percent to a record as U.S. consumers spent $52.4 billion, according to the National Retail Federation.

Barrick Gold surged 2.4 percent to C$51.18. Goldcorp Inc. (G), the world’s second-largest gold producer by market value, climbed 0.7 percent to C$50.72. Teck Resources Ltd., Canada’s largest base-metals producer, advanced 3.6 percent to C$33.86. First Quantum Minerals Ltd. (FM), Canada’s second-largest publicly traded copper producer, soared 9.7 percent, the most in the S&P/TSX, to C$18.62.

Energy Gains

Energy producers rose after crude oil futures advanced to $98.21 a barrel, the highest settlement since Nov. 17. Canadian Natural gained 3.7 percent to C$35.20. Suncor Energy Inc. (SU), Canada’s biggest oil and gas producer, increased 2.7 percent to C$28.91. Cenovus Energy Inc. (CVE), the country’s fifth-biggest energy company by revenue, jumped 3.1 percent to C$31.09.

Banks gained, following U.S. and European lenders, amid speculation European policy makers are intensifying efforts to contain the debt crisis.

Royal Bank of Canada (RY) advanced 2.1 percent, the most since Oct. 27, to C$44.32. Bank of Montreal (BMO), Canada’s fourth-biggest bank, surged 2.3 percent to C$56.74. Bank of Nova Scotia (BNS), the third-biggest lender, jumped 1.7 percent to C$49.05.

To contact the reporter on this story: Kaitlyn Kiernan in New York at kkiernan2@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.